Know before you go: uncovering the payoffs of higher education

Especially in today’s competitive marketplace, it is critical for students and families to understand the return on their college investment in relation to the debt loads students will be carrying into their future.—Gov. John Hickenlooper

A graduating Virginia high school senior enjoys a host of college choices. A driven student might go to the storied University of Virginia in Charlottesville, founded by Thomas Jefferson, James Madison and James Monroe in 1819.

Four years later, with a degree in either art or anthropology, she may enter the workforce and eighteen months after that, according to a new database from the state of Virginia, she will be earning roughly $28,000 a year.

Her best friend might go to Danville Community College, founded in 1936 as Danville Textile School. Eighteen months later her friend would leave with a diploma in electrical or communications technology. And eighteen months after that, she would likely be earning over $34,000.

Another high school senior weighing a four year business degree at either UVA or George Mason University in Fairfax might like to know that UVA business graduates earn $8,714 more per year than GMU grads. In economics, however, the two are very close.

All of this is information at a high school senior might like to have at hand, but until now has been denied to them. That is changing, however, and fast.

Virginia has been online for nearly a year now with its job performance data, Colorado went up this week and other states will follow soon. Waiting in the wings is proposed federal legislation, spearheaded by Senators Ron Wyden (D-OR) and Marco Rubio (R-FL), which could turn everything upside down.

The statewide data is culled from state unemployment records kept by every state to mete out unemployment benefits. Until now no one had thought to leverage these numbers to inform education and career choices. But by separating the data from individual identities, that same data can reveal much about education and careers.

Some critics fear that the numbers will be misunderstood and abused, that education will be reduced to job-hunting rather than horizon-enlargement.

But proponents of the data-driven approach see a path to modernize how Americans think about post-secondary education. Whether you end up at a four-year school or not, they argue, real data makes for better policy and better consumer choices.

Virginia leads out

All this data on Virginia colleges is readily available online thanks to the State Council of Higher Education for Virginia. SCHEV has built an interactive website with the numbers.

One of the key findings, said Tod Massa, SCHEV’s Director of Policy Research and Data Warehousing, the value of community colleges.

“Those are high value programs with an extraordinarily low cost to the students,” Massa said. Statewide, for example, graduates of community college occupational and technical programs earn almost $2,500 more per year, on average, than those who earn four-year baccalaureates — at least 18 months out.

Among four year degrees, the gulf is wide from one major to the next and, within majors, from one school to the next. A painting major at the Virginia Commonwealth University scrapes bottom with $23,000, while a human resources management major from the University of Richmond pulls in $69,000 after eighteen months.

Defenders of traditional liberal arts education argue that these majors have higher upside. And because they emphasize information processing, cognitive skills, and higher abstraction, they are more likely to adapt with a changing economy. The current data, its defenders acknowledge, will be inadequate until it can be stretched over a 5 or 10 year horizon.

Virginia took pains to minimize opposition before the database rolled out, recognizing that there would be resentment when comparisons between majors and schools were laid bare. Academics in less remunerative fields or institutions instinctively object to quantifying the difference.

“The primary complaint people tend to fall back on is the notion of education for education’s sake,” Massa said, and he acknowledges that many students will prefer to earn less if they can work in gratifying careers.

But Massa counters that parents and students have a right to make those judgments themselves, and cannot do so properly without real data.

“This puts all the different majors and degree programs on the same table of analysis, with a common basis of fact,” said Massa, a key player in building Virginia’s system now working with Sen. Wyden’s staff on the national proposal.

Colorado next

Following closely on Virginia’s move is Colorado, which this week launched its own database, built by and hosted at College Measures, a company that aims to harness this data around the country.

“Especially in today’s competitive marketplace,” wrote Gov. John Hickenlooper in a cover letter to the report, “it is critical for students and families to understand the return on their college investment in relation to the debt loads students will be carrying into their future.”

“There is a reality out there,” said College Measures president Mark Schneider, in Denver Wednesday for the unveiling of the new database. “The pattern is very clear. Business, health and technical fields pay a lot more than liberal arts degrees, at least in the short term. Community college technical degrees are very valuable.”

Schneider layers his Colorado data with heavy caveats. Most importantly, he notes, a large percentage of Colorado students come for the mountains and then leave the state for employment. The database loses all these students. It also loses any who take employment with the federal government.

Schneider also adds the standard caveat that current data only tracks earnings 18 months after graduation.

Next phase

Given these caveats, care must be taken with the current data sets, says Trent Reindl at the National Governor’s Association, who has been tracking this issue for governors in multiple states.

The two big questions policymakers have to wrestle with are how to carry data across state boundaries,” Reindl said, noting that currently a student who leaves the state of their alma mater falls off Virginia’s radar.

The second concern, he said, is to measure performance over time. Virginia’s data at the moment only captures a snapshot in time — 18 months out. This is not negligible, Massa points out, since student loans are due at that point. But neither is it the complete picture.

Liberal arts majors, it is widely believed, have a higher growth potential than the technical fields or support health professions, which start fast but cap out earlier.

Reindl notes that many liberal arts majors feed into unexpected careers, and cites multiple philosophy majors he knows who work on Wall Street.

But he acknowledges that he doesn’t really know what the growth curve is for liberal arts majors. “I think that’s another reason we should be doing these sort of data mashes, because we don’t really know, conclusively.”

There is, then, broad agreement on the next steps in this effort.

The first is to nationalize the data, hopefully by using Social Security records, which are much more powerful than the unemployment data currently used. This will allow states to account for those who work out-of-state, closing a critical gap.

And the second is to push the data back in time. “It’s not just what happens six months or a year after graduation, but what happens three years after you graduate. You don’t necessarily get the high-paying job right out of college.”

In addition to the above two variables, Virginia is adding a third. Later this year, the state will bring student debt data on line, alongside the earnings data. Major by major, program by program.

“That will be a whole new set of discussions,” Massa said.

Eric Schulzke writes on national politics for the Deseret News. He can be contacted at eschulzke@desnews.com.